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  1. Phil

    Good morning! 

    That last oil entry was a bust (now $95.75) and, of course, tomorrow is inventories but the same weather that kept people out of stores may have kept them out of gas stations so I'm not expecting a bullish one.  Still, we don't touch the .25 lines this early in the cycle and they are clearly going for $96 on /CL so we better let them and then see what happens.  $95.75 is about where we pressed our USOs yesterday and we're back to 10 so we can roll up and do it again if we have to.  

    In general, we're looking strong again and, once the S&P is back over the 1,560 line – there's nothing to do BUT be bullish for the duration.  

    Case-Shiller is going like gangbusters, with the 20-City Composite up 8.1% from last year.  Keep in mind that means, if you buy a $300,000 home and put $60,000 down on a 4% mortgage, your monthly payments are about $1,500 and, at the end of the year, your home is worth $24,000 more than you paid for it.  THAT is how you drive people back to the housing market at a rapid pace because that buyer tells two friends and they tell two friends and so on and so on….

    Don't forget, regular people can't play stocks, options, commodities futures… to hedge against inflation – for most people,  their home is their only investment and, once you string together a couple of 8% years and people begin to refinance their homes and buy nice cars that they show off to their family and neighbors as they make fun of them for being too scared to buy a home in 2010 or 2011 – that's how you get that stampede into housing going.

    Also, people who are thinking of buying homes tend to browse all the time and when they see homes they like rising in prices and getting snapped up quicker and quicker – it motivates them to get on board before the train leaves the station.  This is a great formula for building a sustainable base under our rally so we'll watch those builder reports very closely but it's still very early innings if we're going to have a proper housing recovery, of course.  

    As you can see from the above chart – we're still so far from even that 8% a year is nothing so it's our game to lose at this point – it would take a pretty good shock to derail the rally when you consider there are still so many people trapped in underwater mortgages (keeping homes off the market) and so many people who have put off moving for years as we work through the crisis but are getting ready now and so many households that were not created (recent college grads mostly) as that market fell apart and, as noted above, now the own vs. rent calculation has shifted back to own in a big way – a perfect recipe to continue the rally in housing for the foreseeable future.  

    At the open: Dow +0.42% to 14509. S&P +0.46% to 1559. Nasdaq +0.44% to 3250.

    Treasurys: 30-year -0.29%. 10-yr -0.17%. 5-yr -0.08%.

    Commodities: Crude +0.96% to $95.72. Gold -0.51% to $1598.35.

    Currencies: Euro +0.07% vs. dollar. Yen +0.21%. Pound +0.17%.

    10:00 Consumer Confidence
    10:00 State Street Investor Confidence Index
    10:00 Richmond Fed Mfg.
    10:00 New Home Sales
    1:00 PM Results of $35B, 2-Year Note Auction
     

    Market preview: Stocks look poised to open higher after a batch of better-than-expected economic reports point to an ongoing recovery. Durable goods orders climbed 5.7% in February, and the January Case-Shiller home price index soared to its biggest annual increase in six years. European bourses are mostly higher. Still ahead: consumer confidence, new home sales, Richmond Fed.

    "At no point is it possible to bail-in depositors below €100K, now or in the future," Reuters reports an EU Commission statement as saying (never mind this is precisely what was attempted in Cyprus last week). It's not our job to evaluate Dijsselbloem's comments on Cyprus, the EU adds. "Dijsselbloem was wrong," says the ECB's Benoit Coeure. "Cyprus isn't a model."

    With traditional housing inventory shrinking to scarce levels, housing bears hang their hats on the so-called "shadow inventory," but that too is disappearing with CoreLogic reporting this potential supply off 18% Y/Y in January to 2.2M units vs. about 2M existing homes currently available for sale. 

    Friend of the Devil:  Warren Buffett (BRK.B) becomes a long-term investor in Goldman Sachs, agreeing to amend his warrant agreement to accept shares for any difference between the $115 exercise price and the value of the stock on Oct. 1, 2013. Buffett: "We intend to hold a significant investment in Goldman Sachs." GS +1.4% premarket. (PR)

    Opinions on retail sales are differing with today's Redbook report on chain store sales indicating consumers are stocking up on spring goods while ISCS-Goldman warned earlier that a batch of winter storms is keeping sales of spring goods lower. The contradicting views follows a familiar path in retail with some analysts seeing the glass half-full (consumer confidence up) and others half-empty (paychecks lower). The tale of the tape shows retail mildly underperforming broad market indexes: S&P Retail ETF (XRT) +7.6% YTD vs. S&P 500 +8.8%.

    Royal Dutch Shell (RDS.ARDS.B) says it received approvalfrom the Chinese government for its first shale gas production-sharing contract in China. Shell plans to spend $1B exploring, developing and producing shale gas with partner China National Petroleum in the Fushun-Yongchuan block in the Sichuan basin. 

    As gold miner (GDX) prices fall, company insiders are buying at their fastest pace in years, according to INK Research, which sees seven precious metals stocks on the Toronto Exchange with buyers for every one with sellers. "That is the type of insider buying we saw in the broad market during the height of the great financial crisis."

    When Elon Musk tweets, do people listen? Shares of Tesla Motors (TSLA) are still holding up even though the electric vehicle automaker's CEO tipped off a potential secondary offering of stock yesterday. Though effusive confidence by a CEO is a nice touch, some traders are warning that Tesla's stock price is looking even riskier with the latest development. Look for Elon Musk to give some enticing details on development of the Model X to help smooth over any news of a capital raise. TSLA +0.2% premarket to $37.60.

    "The big opportunity over the next two years is the low-end phone market," Gene Munster tells Bloomberg, expecting Apple's (AAPL) earnings growth to return in H2 and reiterating his Buy rating on the stock. Munster sees just a modest increase in the dividend – from $10.60 to $14 – and no bump in the buyback. Shares +0.3% premarket.

    Apple (AAPL -0.2%) roundup: 1) Oppenheimer is cuttingFY13 and FY14 estimates. "Much of the revision appears built into investor expectations … However, we also don't see much of a [near-term] positive catalyst until we get closer to the product cycle or get more clarity on Apple's cash intentions." 2) Apple reportedly plans to triple the number of Apple Premium Reseller stores in India to ~200 by 2015. The report comes as Apple's Indian sales start to accelerate. 3) The Next Web takes a look at the complex technologies used by acquisition target WiFiSLAM to master indoor mapping/positioning. (Gene Munster)



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Zero Hedge

Pentagon's New "Law of War" Manual "Reduces Us to the Level of Nazis"

Courtesy of ZeroHedge. View original post here.

Submitted by George Washington.

The Pentagon’s new Law of War Manual – a 1,200-plus page document issued in June by the Defense Department’s Office of the General Counsel – is barbaric.

The Manual is so bad that one of the leading experts on the law of war (Dr. Francis Boyle) – who wrote the Biological Weapons Anti-Terrorism Act of 1989, the American implementing legislation for the 1972 Biological Weapons Convention, served on the Board of Directors of Amnesty International, and teaches international law at the University of Illinois, C...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

U.S. stocks set for bumpy end to a wild week (CNN)

After some of the wildest days on markets in recent memory, the weekend can't come soon enough for many. Panicked selling Monday and Tuesday gave way to a scramble to buy Wednesday and Thursday.

While Many Panicked, Japanese Day Trader Made $34 Million (Bloomberg)

While a lo...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Phil's Favorites

Fed Queen Race: Personal Income Rises 0.4% as Expected; Good for Rate Hikes? GDP?

Courtesy of Mish.

Personal income for July rose as expected in today's Personal Income and Outlays report. Consumer spending rose nearly as expected, led of course by auto sales. Price pressure was nonexistent.
There's no hurry for a rate hike based on the July personal income and outlays report where inflation readings are very quiet. Core PCE prices rose only 0.1 percent in the month with the year-on-year rate moving backwards, not forwards, to a very quiet plus 1.2 percent. Total prices are also quiet, also at plus 0.1 percent for the monthly rate and at only plus 0.3 percent the yearly rate.

On the consumer, the data are very solid led by a 0.4 percent rise in income that includes a 0.5 percent rise in wages & salaries which is the largest since November last year. Other income ...



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Kimble Charting Solutions

Dangerous Place for a kiss of resistance, says Joe

Courtesy of Chris Kimble.

Anyone noticed its been a wild week? Has anything been proven with all the volatility the past 5-days?

What happens at (1) below, could tell us a good deal about what type of damage did or didn’t take place this week!

CLICK ON CHART TO ENLARGE

The large decline on Monday cause the S&P 500 to break support of this rising channel.

The mid-week rally pushed the S&P higher and as of this morning it is kissing the underside of old support as resistance now, near the 50% retracement level of the large decline over the past few weeks.

Why could th...



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Chart School

Shorts Rally - But For How Long?

Courtesy of Declan.

A second day of gains keeps pressure on shorts in squeezing them out of their positions, but is also looking to sucker shorts into trying to second guess when this rally will end.

The S&P is heading fast towards 2,044. Given the speed at which it has enjoyed this advance it will be there by Tuesday! In reality, it will likely slow before it gets there. When markets do head lower it will be important they do so slowly to sow further doubt into shorts.


The Nasdaq will be testing resistance tomorrow, and is close to coming up against its 200-day MA.  Those who bought the low will be very happy.

...

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Sabrient

Sector Detector: Finally, market capitulation gives bulls a real test of conviction, plus perhaps a buying opportunity

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Courtesy of Sabrient Systems and Gradient Analytics

The dark veil around China is creating a little too much uncertainty for investors, with the usual fear mongers piling on and sending the vast buy-the-dip crowd running for the sidelines until the smoke clears. Furthermore, Sabrient’s fundamentals-based SectorCast rankings have been flashing near-term defensive signals. The end result is a long overdue capitulation event that has left no market segment unscathed in its mass carnage. The historically long technical consolidation finally came to the point of having to break one way or the other, and it decided to break hard to the downside, actually testing the lows from last ...



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OpTrader

Swing trading portfolio - week of August 24th, 2015

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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ValueWalk

Some Hedge Funds "Hedged" During Stock Market Sell Off, Others Not As Risk Focused

By Mark Melin. Originally published at ValueWalk.

With the VIX index jumping 120 percent on a weekly basis, the most in its history, and with the index measuring volatility or "fear" up near 47 percent on the day, one might think professional investors might be concerned. While the sell off did surprise some, certain hedge fund managers have started to dip their toes in the water to buy stocks they have on their accumulation list, while other algorithmic strategies are actually prospering in this volatile but generally consistently trending market.

Stock market sell off surprises some while others were prepared and are hedged prospering

While so...



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Digital Currencies

Bitcoin Battered After "Governance Coup"

Courtesy of ZeroHedge. View original post here.

Naysyers are warning that the recent plunge in Bitcoin prices - from almost $318 at its peak during the Greek crisis, to $221 yesterday - is due to growing power struggle over the future of the cryptocurrency that is dividing its lead developers. On Saturday, a rival version of the current software was released by two bitcoin big guns. As Reuters reports, Bitcoin XT would increase the block size to 8 megabytes enabling more transactions to be processed every second. Those who oppose Bitcoin XT say the bigger block size jeopardizes the vision of a decentralized payments system that bitcoin is built on with some believing ...



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Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



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Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



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Promotions

Watch the Phil Davis Special on Money Talk on BNN TV!

Kim Parlee interviews Phil on Money Talk. Be sure to watch the replays if you missed the show live on Wednesday night (it was recorded on Monday). As usual, Phil provides an excellent program packed with macro analysis, important lessons and trading ideas. ~ Ilene

 

The replay is now available on BNN's website. For the three part series, click on the links below. 

Part 1 is here (discussing the macro outlook for the markets) Part 2 is here. (discussing our main trading strategies) Part 3 is here. (reviewing our pick of th...

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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




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